Write about the issues with noncomparability of U.S. Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS) financial statements, and the environmental factors that affect a MNC.
Specifically, you must address the critical elements listed below:
III. Noncomparability of Financial Statements: What are the resultant problems in performing international financial analysis?
A. Identify the issues when comparing a MNC’s financial results to a corporation operating solely in the United States.
B. Describe the kinds of analysis you would recommend for use by the investor.
C. Discuss why harmonization of U.S. GAAP and IFRS would benefit investors.
IV. Environmental Factors: How do environmental factors affect accounting standards and financial statement analysis?
A. In looking at your MNC (NESTLE) and the exchange it trades on, identify the legal system of the country in which NESTLE stock is traded.
Explain the impact the legal system has on investing in this corporation.
B. Discuss how economic and political factors influence the accounting standards in at least one country that the MNC operates in.